Investing for Beginners .EU, investing Business is a combination of war and sport.
Andre Maurois

Search results

Investing in Africa
Investing in Africa even sounds a little extreme. But investing in Africa not only sound extremely - it is like this in fact. If we would distinguish developed and emerging markets, then most of the Africa’s countr

Where Are the Investment Markets Moving Now?
  Some of the market participants call the current situation a “crisis” others are starting to be convinced that we are in a bear market. While others just don’t know how to call it. Well, I call

Stocks Riskier than Bonds?
  It is so common that stocks are riskier investments than bonds; nobody is even considering this question. Would I doubt it? Of course not, stocks are stocks and bonds are bonds. But I would like to look at it fro

How ECB Is Affecting Investment Markets?
  Today was announced very interesting news. The news is about the fact that ECB (European Central Banks) lends 489 billion of Euros to the banks. It is a really huge amount of capital that flows from ECB to the fi

Baltic Investment
  Baltic Stock Exchange   Baltic stock exchange now belongs to the world gigantic stock exchange NASDAQ OMX, and now is called NASDAQ OMX Baltic. Historically Lithuania, Latvia and Estonia had their own nati

(Are you looking for investment definition?)   Investments are instruments that allow us to receive a higher amount of money than was spent. If someone spends 10 euros or dollars and he knows that he will receive

Interest Coverage Ratio
  Interest coverage ratio shows company’s ability to pay interests for its financial debts. Interest coverage ratio is a ratio between operating profit (EBIT to be more exact) and expenses for interests. The

  Investing - what is that exactly? Probably you have heard many different definitions of investing. However, what is the essence of it? The essence is very simple: investing - a present sacrifice for the future.If

Derivative Financial Instruments Derivatives are so called because they are constructed from other traditional securities, and operate the rights to them. Apart from the fact that there are some basic derivative instrum

Investment in Index Funds
  Investment index funds are contrast to the actively managed funds. These funds do not try to exceed the benchmark, openly saying that just going to keep with it.And the serious advantage of them – applied f

Investing in Funds
Investment Funds Strategy   Indeed, investing in mutual funds is not complete investment strategy, but only a part of it, or more precisely, only the choice of investment instrument. For example, if the strategy d

Online Investing
Few decades ago all the investors was acquiring stocks calling to broker by phone or using some other way to contact him. However, computerization of the world has changed investing significantly. Online investing became

Investment in Short ETF
  Investment in Short ETF is very different from regular investing. “Short” – means short selling transactions when securities are loaned and sold with obligation to return it after some pre-agree

Investment in Ultra Short ETF
  Investment in Ultra Short ETFs combines characteristics of both: Ultra ETF’s and Short ETF’s. The value of Ultra Short ETF changes twice in opposite direction to the value of index which is followed b

Investment Policy
  An investment policy is an investment philosophy, main principles to be used of an investor. Investment policy may be written or not, and is needed for the investor to maintain attitudes during market turmoil. In

  A share is a unit of firm’s ownership, which represents the rights and obligations of the shareholder (owner of the shares). If investor owns all shares of the company he is a complete owner, but if he

Book Value of Share
  A book value of share is calculated dividing all company’s book value (less preferred equity) by its common share number. For example, if company’s book value is 1,000,000 USD and issued share nu

Dividend Policy
  A dividend policy is a company’s written practice that describes dividend payments scale over time. Dividend policy may be as short as target dividend payout ratio or also include some reaction to a ch

Dividend Stocks
  Dividend stocks are called stocks that have high dividend yield and high dividend payout ratio. Normal dividend stocks should have stable 6%-10% dividend yield and possible 60-100% dividend payout ratio. High div

Ex-Dividend Date
  Ex-dividend date is a first day when investor does no longer receive dividends paid by company’s shares. This is important factor because the period of shares' settlement after transacti

Stock Buyback
  A stock buyback (share repurchase) is a company’s purchase of its own stock on the market. It is contrary way to pay out capital for shareholders to dividends. Stock buybacks are getting more and more

  Flipping is partly an investment strategy, partly a speculation when investor resells acquired property quickly on purpose to get fast profit.    Flipping is most common in IPO’s when retail inv

Investment Tactics
  Investment tactics are the rules for investment actions that help to react on market conditions and achieve more efficient results. Investment tactics deal with lower scale questions than investment strategy, whi

Investment Portfolio
  An investment portfolio is a composition of different investments made on purpose to achieve the highest return at predetermined risk level. Investment portfolio can include all kinds of investments: stocks,

Diversified Investments
  Diversified investments are investments that are well diversified, which should include regional diversification, allocation between asset classes, sectors, maturity, denomination of currencies and other characte

Buying on Margin
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth?     Buying on margin gets popularity during every strong bull market. Unfortunately, it be

  A diversification is an investment technique or a part of an investment strategy, which is used to reduce the investment risk of the portfolio, including in it larger number of different securities or other inves

True Investment
  True investment is a term used by Benjamin Graham to describe an investment that fits all his criteria of investment philosophy (policy). Later this term was used by Warren Buffet, but he followed Benjamin’

Institutional Investor
  An institutional investor is an investor that is a corporation/institution. Institutional investors have high impact to investment markets and sometimes decisions of most known institutional investment manag

Small Cap Stocks
  Small cap stocks are stocks of lower market capitalization. All stocks may be classified to large cap, mid cap and small cap (if ignoring mega, nano and other modern classification caps). There is no united class

Investment Banking Services
Investment banking services are corporate finance services provided by investment banks. Investment banking includes such services like capital rising, securities issuing, IPO’s running, mergers and acquisitions

Junk Bonds
  Junk bonds are bonds that have a speculative-grade credit rating, which is BB or lower.    Junk bonds are riskier but they have higher yields. The spread between junk bond yield and safe bond yield (c

Penny Stocks
  Penny stocks used to be described as stocks which price on stock exchange are lower than 1$ or 5$ (there is no officially approved norm). However, it is not very fair to judge a company for its share price on exc

Cheap Stocks
  Cheap stocks are such stocks that are traded at low valuation multiples. For example, if you see a telecom or utility company of which P/E is equal to 6 and EV/EBITDA is equal to 3, you may say it is a cheap stoc

Holding Company
  Holding company is a type of a company which main activity is to invest in other companies. Holding as itself does not do any activity instead of managing their subsidiary companies and searching for new investme

Operating Leverage
  An operating leverage is a company’s EBIT (earnings before taxes and financial operations) sensitivity to changes of sales. As the sensitivity is measured to operating income (close to EBIT), the

Market Risk
  A market risk is a systematical risk that cannot be diversified. There are some risk factors that can make effect on the whole market: economical cycles, nature disasters, wars; and such are not diversifiable ris

Financial Leverage
  A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca

Investment Management Fees
  Investment management fees (fees that are paid straight to investment manager) basically are one of these types:   Performance based fee. Performance based fee is calculated according to increase of inve

  Investment management is a complete science and if you are expecting to become a professional investment manager in few hours you should get disappointed. However, there are several most important guidelines at i

Investment Performance Measurement
  Many investors are happy about investment managers until the stock market is growing, but when the decline starts investment managers gets only the worst words about their job. However, this is wrong attitud

Return on Investment
  Return on investment (ROI) is a percentage that shows profitability of an investment or investment portfolio. Return on investment calculation:   CALCULATION:   Return on investment = net in

  Inflation is a percent that reflects a price increase of goods and services portfolio. When inflation occurs, money is losing its purchasing power. For example, if inflation would keep at 8% for 9 years (it would

P/E Ratio
  P/E ratio is the most popular valuation multiple that is used for stock analysis. This ratio shows the price of the stock compared to its earnings. The multiple is so popular because of its simplicity and im

PEG Ratio
Price-to-Earnings to Growth Ratio   PEG ratio is quiet popular among retail investors, however professionals do not use it often because of this ratio subjectivity. PEG ratio shows how expensive is stock compared

P/B Ratio
P/B (P/Bv or price-to-book) ratio shows how expensive stock is compared to its books value. Company’s book value (also called equity, capital, shareholders funds etc.) is equal to company’s total assets les

P/NAV Ratio
Price to Net Asset Value    P/NAV ratio shows how expensive share is compared to its NAV (net asset value). This ratio is very similar to P/B ratio but in this case market values (not book values) are used. M

EV/S Ratio
Enterprise Value to Sales Ratio   EV/S ratio shows how expensive firm is compared to its sales. This multiple is important when company is unprofitable or profits margins are very low and turnaround is expected in

EBITDA Multiple   EV/EBITDA ratio shows how expensive firm is compared to its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). EV to EBITDA multiple is mostly used by professionals because

Relative Valuation
Comparative analysis    Relative valuation is stock valuation method that gained its popularity because of simplicity and practical importance. The key principle of relative valuation is about valuation multi

  Correlation is a statistical measure that shows the relationship between two objects. Correlation may range between +1 and -1. If correlation between the objects is 0 that means they are not dependable on each ot

GDR (Global Depository Receipt)
  GDR (Global Depository Receipt) is a security’s certificate that is traded on some European stock exchange and represents shares of foreign company. GDR normally is denominated in one of the main currencies

Depository Receipts
  Depository receipts are certificates that makes easier to invest in foreign stocks. Depository receipts lowers administration costs for foreign investment and makes foreign investments more trustful for local inv

Hedge Funds
  Hedge funds are investment funds that use financial leverage and derivatives to achieve better investment results. The name of hedge fund came from hedging, which originally is a defensive investment strategy, bu

Free Float
  Free float is a proportion of company’s shares that are really traded in the market. Normally, free float is lower than the total outstanding number of shares, because most of the largest shareholders do no

Political Risk
  A political risk is related to political decisions and political environment development, and is one of the main risks when investing in emerging markets. Developed markets also contain political risk, but there

Days Sales Outstanding
  Days sales outstanding (DSO) shows how quickly company collect its money from sales. Usually company doesn’t get paid immediately; depending on business and distributors network such period may be from seve

EBITDA Coverage Ratio
  EBITDA coverage ratio (also called EBITDA to Interest Coverage Ratio) shows company’s capability to deal with its financial leverage. If this ratio is too low, that may show company is in trouble and may ha

Profit Margin
  Profit margin normally refers to net profit margin, which is net profit divided by sales. But one should remember that profit might be of different kinds (net profit, pretax profit, EBIT, EBITDA and gross profit)

  ROE (Return on Equity) shows profitability of company’s book value. Company’s book value (equity) is equal to company’s assets less liabilities, and ROE is usually higher if company ha

Costs of Buying Stocks on Margin
  Buying on Margin Costs of Buying Stocks on Margin Margin Call The Pros and Cons Psychology: Is it worth?     We won’t talk about the possible losses in here. The goal of this paragraph is t

Employee Stock Options
  Employee stock options are options that are given to employees as part of motivation package and gives an opportunity for employees to acquire shares of the company in the future at a lower price. In their meanin

No-Load Fund
  No-Load fund is a fund that does not have a load fee which is paid by investor that acquires the mutual fund. There are two types of load fees: front-end load and back-end load, and ‘no-load fund’ sho

Passive Investment
  Passive investment (management) is an investment style when investors skips the steps of securities picking and market timing and invests mainly in index funds that have the lowest expenses.    P

Discount Broker
  A discount broker is a brokerage company that acts as an intermediary for securities trading and offers is used to offer its services for a lower commission fees. At the same time discount brokers provide less co

Ask Price
  Ask price is the lowest price at which seller of a security is willing to sell indicated amount of securities. In stock exchange many investors leave their sell orders through their brokers and every sell order t

Bid Price
  Bid price is the highest price at which buyer is willing to buy specific amount of securities. Investors often leave their buy orders through their brokerage account while each buy order that stays in the exchang

Real Estate Investment Management
  Real estate investment management is a management of real estate portfolio. Real estate investments are different from standard investments (securities) and management of real estate investments differs from inve

Private Equity Investor
  Private equity investor is a corporation or individual that is investing in stakes of unlisted companies. The only different between equity investor and private equity investor is that the last one invests in unl

  Earnings are calculated gains of the company and should represent the profit of that business. There are several types of earnings:   Retained earnings are equal to net profit less dividends. Net earnin

  The term income may have several meanings. In corporate finance it basically means profit or earnings that are equal to revenue less expenses. But in some cases income may also indicate company’s revenue bu

Net Income
  Net income (net profit) is a financial indicator of the company that shows the real profitability of the business in accordance to its capital structure. Net income is equal to all revenue and gains less all expe

  Loss (net loss) is a financial situation of the company when its revenue is lower than expenses. It is natural that every company tries to receive a profit instead of a loss, but not every succeeds that. Some com

Gross Income
  Gross income (gross profit) is equal to company’s revenue minus all cost of goods sold (COGS). Gross income is just one type of income; other types of income are operating income, pre-tax income or net inco

Operating Income
  Operating income (operating profit) is the type of company’s profit that comes from operating activity. That means operating profit is lower than gross income by operating expenses but higher than pre-tax p

Times Interest Earned Ratio
  ‘Times interest earned ratio' compares ‘earnings before interest and taxes’ of the company to its interest expenses. Low ratio means that company may be in dangerous situation and its interest e

Debt to Asset Ratio
  Debt to asset ratio (also called as D/A ratio, Debt/Asset) measures how big is company’s debt compared to its assets. Debt to asset ratio is very similar to debt to equity (D/E) ratio but normally is lower

Turnover Ratio
  (1) Turnover ratio of mutual fund shows how quickly assets of the fund are changing. Actively managed investment funds have higher turnover ratio than passively managed funds, and normally turnover ratio is measu

Cash Flow Coverage Ratio
  Cash flow coverage ratio measures company’s ability to repay its debt. This ratio compares operating cash flow of the company to its debts.  If ratio is low (lower than 0.2), it may indicate potential

Asset Turnover Ratio
  Asset turnover ratio compares company’s sales and assets in order to identify the efficiency of assets used in the business. In simple words, it shows show much of sales are generated by company’s ass

Working Capital Management
  Why Working Capital Is Important? Working capital is one of the main parts of company’s finances and every manager, even of the small company, manages working capital despite the fact he knows about that o

Before Tax Cost of Debt
  Before tax cost of debt (or pretax cost of debt) usually is a standard cost of debt. When you determine the interest rate paid by the company for its debt, it is equal to debt cost before tax. However, interest e

  Capex (capital expenditure) is company’s investment in long-term assets that are needed to continue the business or for future’s growth. The perfect examples of capital expenditure can be an acquisiti

Profit Taking
  Profit taking is the selling of stocks or other investments after sharp rise in prices. Investors are say that they ‘took profit’ when they sold their stocks after good rise when they seceded with sto

Return on Invested Capital
  Return on invested capital (ROIC) or also called return on capital is a financial ratio employed to measure nominal company’s return that is earned by capital invested in operating asset. Basically return o

Receivables Turnover
  Receivables turnover ratio (also called as accounts receivable turnover) is a financial ratio that measures how efficiently company collects its receivables. If receivables turnover is very low, it means company

Current Ratio
  Current ratio is a financial ratio that measures company’s financial liquidity in short term. In simple words, this ratio compares company’s short-term assets to its short term liabilities. If short-t

Capital Adequacy Ratio
  Capital adequacy ratio is the main financial ratio for banks to measure whether the bank has enough of capital on which depends the riskiness of the bank. Banks are borrowing money from other depositors and it is

Net Interest Income
  Net interest income is an indicator that measures lending business performance of a financial institution. Basically, it is equal to interest income from loans and other assets less interest expenses for deposits

Net Interest Margin
Net interest margin shows the profitability of the lending business for a bank or other financial institution. Lending business is the core business for most of the banks, and the profitability of this operational segmen

Cost/Income Ratio
  Cost/income ratio is very popular financial ratio in bank analysis. This ratio measures the relation of bank’s operating costs to operating income. Basically, lower ratio is better because means higher prof

Non-Performing Loan Ratio
  Non-performing loan ratio measures the quality of the loan portfolio of the financial institution. This financial ratio compares non-performing loans to the total loan portfolio (loans are assets for the bank), a

Loan to Deposit Ratio
Loan to deposit ratio is financial ratio used for banks or other financial institutions. This ratio compares bank’s loan portfolio to deposit portfolio and measures financial liquidity of the institution.  &n

Reserve Ratio
  Reserve ratio (reserve requirement or cash reserve ratio) is a ratio that is used by central bank of an area to regulate the financial market. This financial ratio compares the cash of the bank to the deposits th

Days Payable Outstanding
  ‘Days payable outstanding’ ratio shows how long it takes the company to pay its liabilities to the suppliers. The longer period means that company is not in a hurry to settle up its debts to the suppl

Liquidity Ratio
  Liquidity ratio is a ratio that measures company’s liquidity. At first, it is needed to mention that liquidity may have two meanings: financial liquidity of a company or market liquidity of some asset. Liqu

Equity to Asset Ratio
  Equity to asset ratio measures company’s riskiness by comparing its equity to its assets. If this ratio is very low (lower than 0.3), it might mean that company may be at risk if conditions of the market wo

Asset to Equity Ratio
  Asset to equity ratio compares company’s assets to the book value and measures the riskiness of the company. This ratio cannot be lower than 1.0, and if it is equal to 1, it means that assets are equal to e

Total Debt Ratio
  Total debt ratio compares total liabilities to total assets. The higher ratio represents riskier situation. And if this ratio is equal to 1.0, it would mean that liabilities are equal to assets or in other words

Non-Operating Assets
  Non-operating assets are assets of the company that aren’t used in the main activity of the company. Such assets can be either financial or non-financial. This asset type is very important during the valuat

Book Value
  There are two main types of values that are used in finance: Book value  Market value   Book value is a value that is recorded in the balance sheet of a company. Every asset of the company must

Market Risk Premium
(Equity Risk Premium)   Every investment carries some level of risk and some level of potential return. Those two measures are closely related in investment finance and are used in CAPM which calculates cost of eq

Back-End Load
  Back-End Load (redemption fee) is a load fee which is similar to ‘front-end load’ but is paid when investor sells his mutual fund units instead of during the acquisition as in case of ‘front-end

Last searches: lowe , equity ratio , sell stock , portfolio , discount , liqui , income statement , securities , inventory turnover , investment market , investing , investment , beginners , stocks